Big Four release their wish-lists for Singapore Budget 2020: PwC

This year’s Singapore budget is just around the corner, and the Big Four have released their wish-lists in advance. Consultancy.asia highlights one areas of each firm’s input in a special four-part series. Here, PwC suggests measures toward a caring and inclusive society

PwC Singapore tax leader Chris Woo: “Our recommendations underline key aspects that can enhance the city-state’s competitiveness, security as well as support its enterprises and people. As we continue to embrace technology and move towards becoming a Smart Nation, measures can be put in place to help businesses navigate challenges faced as they innovate, collaborate and internationalise. This can be supplemented with greater support for investments in tech start-ups.”

At first glance, PwC’s wish-list for this year’s Singapore Budget – which is scheduled to be released on Tuesday – might appear like a routine set of recommendations from one of the world’s leading professional services firms; calls to enhance tax competitiveness, incentives to encourage innovation and enterprise, proposals for digitisation. But dig deeper, and the firm has also included a raft of suggestions to help Singapore become a caring and inclusive society.

This shouldn’t perhaps come as a surprise. Last year, PwC Singapore established its own charitable foundation with a focus on the elderly, disabled and education – aimed at addressing the social impact of rapidly advancing technologies in a developed economy with an aging population. Now, among other proposals, PwC suggests that the foreign maid levy relief be extended to all taxpayers who employ foreign domestic workers to care for their elderly parents.

As it stands, Singapore’s foreign maid levy relief is available to married women or divorcees and widows with children at school to mitigate the costs of employing foreign domestic workers, with the initiative aimed at encouraging such women to remain in the workforce. While PwC believes eligibility should extend to all taxpayers in support of the elderly, regardless of marital status and gender, the firm has also forwarded proposals to aid women in the workforce. 

 “Many new mothers will have extended absence from work or leave the workforce altogether to tend to their young children for a variety of reasons,” the firm states in its budget wish-list. “Funding or a new tax relief which will help new mothers to defray the cost of taking care of infants can encourage and support them to return to the workforce after maternity leave and at the same time alleviate the financial burden of working women with young children.”

Other ideas intended to nurture a caring and conclusive society include tax relief for premiums paid on medical-related or health insurance policies (possibly capped and scaled according to age), with a further suggestion of tax relief for the medical costs of biennial health screening for citizens over 50 (thus encouraging preventative healthcare), and for the two lowest personal tax rate bands to be removed so as to increase the tax-free income threshold to $40,000.

When PwC submitted its budget wish-list to the Ministry of Finance last December, the novel coronavirus outbreak had yet to take hold. Yet one further aspect of the recommendations have come to hold greater significance: support for home working. PwC argues the Government should consider introducing deductions for work-related expenses such as business telephone calls and additional utilities as the residence is being partially used for employment purposes.

Next: Deloitte calls for tax credits to encourage skills development.

Next: KPMG shares a vision of Singapore as Asia’s Transformation Capital.